Copper Price to Hit Record by 2013由BS

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"We forecast an underlying market deficit by 2011. . ."

Copper is likely to reach a new high by 2013 as the market moves into a deficit and further tightens in the coming years, RBS Global Banking & Markets said on Thursday.

"Copper remains our most favored base metal," RBS said in a research note, in which it forecast an average cash copper price of $9,000/ton by 2013預 rise of more than 46% from the current cash MCU0 price on the London Metal Exchange. Benchmark three-month copper price MCU3 hit a record high of $8,940/ton in July 2008 and traded at $6,115/ton on Thursday.

"Copper's demand prospects are not among the best but we believe copper producers will have the most difficulty in keeping up with growing demand. We forecast an underlying market deficit by 2011 and that by 2013 it will be fast approaching pre-recession tightness," the bank said.

Copper has doubled in price since the beginning of the year on the back of restocking from China, the world's top consumer of the metal and on expectations of a recovery in the global growth.

Gold was set to average $950 an ounce this year, RBS said, adding gold would benefit from uncertainty ahead, potential dollar weakness and anticipation of inflationary pressures.

But the bank favors palladium the most among all the precious metals, as it bets that rebounding industrial demand will keep the market in large underlying deficit.

"We forecast that the price will more than double in the next four years to $700 an ounce plus," it said. The metal XPD=, used in auto catalysts, jewelry and electronics, currently trades at $290 an ounce.

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